Foreign Investors in Vietnam: New Regulations on Foreign Exchange Management

Vinh LeManager, Dezan Shira & Associates

The Vietnamese government’s new regulations on foreign exchange took effect on September 6. Circular No 06/2019/TT-NNN (“Circular 6”) now governs foreign exchange in foreign investment activities in the country.  

As per Vietnam law, any transaction that is related to direct or indirect investment transaction by a foreign investor must be implemented by an investment capital account opened in a licensed bank which is permitted to trade and supply foreign exchange.

This is an excerpt from an article appearing in Vietnam Briefing, a subsidiary of Dezan Shira & Associates. For the latest economic, regulatory and business news from Vietnam, visit vietnam-briefing.com.

Foreign direct invested enterprise

FDI in Vietnam means the transfer of capital for investment and participation to manage investment activities in Vietnam as defined by Circular 19/2014/TT-NHNN. This includes residents that are entities and receive direct foreign investment, non-residents involved in a business cooperation agreement (BCC), and non-residents who are foreign investors of FDI entities.

To conduct FDI activities, investors are required to open their foreign currency and Vietnamese Dong account at a licensed bank.

According to the new Circular 6, the definition of ‘foreign directed invested enterprise’ has been broadened. This now includes:

  • An enterprise or company that is established by a foreign investor required to obtain an investment registration certificate (IRC);
  • An enterprise or company with a foreign investor owning 51 percent or more of charter capital in an M&A transaction or has been established by specialized laws like insurance and law firms; and
  • Project enterprises or companies established by foreign investors to implement PPP project as per the investment law.

FDI enterprises are required to open a Direct Investment Capital Account (DICA). A DICA is a current account in either foreign currency or the local Vietnamese Dong. A DICA is typically in the name of the FDI entity, the foreign investor in a business cooperation contract or private partnership contract (PPP).

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